In Bryant v Parkland School Division, 2002 ABCA 220, the Alberta Court of Appeal held that three employees were entitled to common law notice upon termination of employment although the employer had provided them with contractual notice.
Background
This case involved Thomas Bryant, Natalie Dzioba and Silke Larison, long-term employees of the Parkland School Division, each of whom had signed an employment agreement that contained a termination clause which read:
“This contract may be terminated by the Employee by giving the Board thirty (30) days or more prior written notice, and by the Board upon giving the Employee sixty (60) days or more written notice”.
On June 2, 2014, the employer terminated each employee’s employment without cause, after providing each with 60 days’ prior notice.
Lower court decision
The employees filed an application with the Alberta Court of Queen’s Bench for damages reflective of common law notice. At trial, they argued that they understood the termination clause as containing a “minimum” amount of notice, and that they would be provided severance calculated based on their years of service.
One employee had been employed with the employer for almost 10 years and the other two for almost 15. Thus, common law reasonable notice would have been considerably greater than the contractual 60-day notice given by the employer.
The chambers judge rejected the employees’ argument, finding that the termination clause was unambiguous and not reasonably open to more than one meaning. The employees appealed the decision to the Alberta Court of Appeal (the “Court”).
Court of Appeal Decision
The Court disagreed with the chambers judge and held that the termination clause was “not sufficiently clear, unequivocal and unambiguous” to remove the employees’ right to common law notice .
In arriving at its decision, the Court reiterated the following principles:
- In employment law, any contractual uncertainty should be resolved in favour of the employee. Thus, if a termination clause could reasonably be interpreted in more than one way, a court should prefer the interpretation that is favourable to the employee.
- Courts take the above approach because there is a power imbalance in the employment relationship and employees have limited opportunities to negotiate their contractual terms.
- Employment contracts are presumed to contain an implied term that requires employers to provide reasonable notice i.e., common law notice upon termination without cause.
- The presumption is rebutted only if the contract unambiguously limits or removes the right to reasonable notice.
The Court found that the termination clause in question did not rebut the presumption that the three employees were entitled to common law notice because:
- the clause did not clearly fix the employees’ entitlement to notice and did not impose an upper limit;
- if the employer had intended to give only 60 days’ notice, it could have simply said so; and
- by saying “sixty (60) days or more”, the contract left open an interpretation that the employer intended the notice period to reflect common law reasonable notice subject to a minimum of 60 days.
Employer takeaways
- Employees who are terminated without cause are entitled to common law reasonable notice. This is the starting point.
- To rebut the above presumption, it is essential to have a written employment agreement that clearly and unambiguously sets out the employee’s entitlement to notice.
- In employment law, any contractual uncertainty is generally resolved in the employee’s favour.
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